Polyester Bottle Chip Giant in Deep Loss: A Warning from Overcapacity and Debt Crisis

A polyester giant that started in 1980 now stands on the brink of delisting. After three consecutive years of losses totaling over 1.6 billion yuan, Sanfangxiang faces dual delisting risk warnings after its 2025 annual report received an 'adverse opinion' and 'internal control negative opinion'. This is not an isolated case but a microcosm of the entire polyester chain's collective pain after a capacity race.

The Capacity Rollercoaster: From 818 Million Profit to 885 Million Loss

Sanfangxiang's financial trajectory vividly illustrates the brutality of the polyester cycle. It posted profits of 630 million yuan in 2021 and 818 million yuan in 2022, when polyester bottle chip demand was strong and PTA margins were high. The turning point came in 2023 as industry capacity was released en masse. Domestic polyester bottle chip capacity exceeded 20 million tons/year, while actual demand was only about 12 million tons/year—a supply-demand gap of 8 million tons that crushed product spreads. As the second-largest player, Sanfangxiang expanded aggressively during this period. Capacity rose, but profits collapsed: losses of 256 million, 487 million, and 885 million yuan in 2023, 2024, and 2025 respectively, with the deficit widening each year.

The core problem lies in an overly narrow chain. Sanfangxiang covers only the PTA-to-bottle-chip segment, relying entirely on purchased PX for its key feedstock. When PX prices swung wildly between 2023 and 2025 due to crude oil volatility and surging domestic PTA capacity, the company's weak cost control was exposed. Its trading business revenue plunged 59.97% in 2025 to 1.713 billion yuan, confirming its loss of bargaining power in the chain.

Debt Chain Reaction: Guarantee Overdue and Related-Party Risks

Losses are only the tip of the iceberg. As of the latest announcement, cumulative overdue debt guaranteed by the company for its subsidiaries and between subsidiaries reached 522 million yuan, accounting for 10.82% of the latest audited net assets. Its core subsidiary, Hailun Petrochemical, failed to pay due financial lease rentals, putting the company at risk as the guarantor. More alarmingly, as of end-2025, the company's accounts receivable from related parties totaled 3.561 billion yuan, but only 107 million yuan had been set aside as bad debt provisions. The auditor explicitly stated it could not obtain sufficient evidence on the recoverability of these amounts—meaning actual bad debt risk may far exceed what is reflected.

Shares of the controlling shareholder, Sanfangxiang Group, and Jiangsu Sanfangxiang International Trade have been judicially frozen. A public auction was initiated in May 2026 but postponed due to enforcement objections—the 'sword of Damocles' over control change remains. The company also provided 600 million yuan in related-party guarantees for its controlling shareholder without recognizing estimated liabilities. These numbers reveal a systemic exposure of governance and related-party transaction risks.

Anti-Internal Competition Policy: A Glimmer of Hope and Uncertainty

The industry is not without self-help mechanisms. In the second half of 2025, national authorities convened a symposium with PTA and bottle chip leaders, sending a clear signal to prevent and resolve 'internal competition'. This policy intervention showed initial results in Q1 2026: Sanfangxiang posted a net profit of 32.74 million yuan, turning around from losses. Concurrently, tensions in the Strait of Hormuz led to a rebound in polyester chain product prices and margins. The company's stock price also temporarily moved above the 1-yuan delisting threshold.

But the sustainability of this turnaround is questionable. In June 2026, Lianhe Credit downgraded Sanfangxiang's long-term credit rating to A- with a negative outlook. Industry capacity elimination is far from complete, with new units still on the drawing board. Even if anti-internal competition policies can temporarily support prices, Sanfangxiang must address structural issues—single-chain structure, reliance on purchased PX, and related-party transaction risks—or its profit improvement may be short-lived.

Practical Recommendations

For Polyester Factories - Reassess expansion pace: In the bottle chip segment where capacity utilization is already below 60%, new capacity should prioritize differentiated products over commodity grades to avoid direct price wars with leaders. - Optimize feedstock sourcing: For companies dependent on purchased PX, lock in a portion through long-term contracts, use hedging, or seek upstream cooperation to reduce price volatility risk. - Control guarantee and related-party transaction scale: Following Sanfangxiang's case, set hard caps on guarantees for subsidiaries and related parties, and conduct regular stress tests to prevent chain defaults.

For Downstream Buyers - Monitor supplier financial health: When sourcing polyester bottle chips, include audit opinion type and guarantee overdue status in supplier assessments, prioritizing integrated players with stable cash flows. - Leverage the adjustment period for negotiations: In the current overcapacity environment, buyers can negotiate longer-term framework agreements to lock in relatively low prices and request more flexible payment terms. - Diversify sourcing channels: Avoid over-concentration on a single supplier, especially those with delisting risk or control uncertainty, to guard against supply disruptions.